Gazprom has threatened to raise imported gas prices further still if Ukraine does not accept its current proposed price of $160 per 1,000 cubic meters, to be implemented from as soon as next year. This represents almost a three fold increase on the current price.
Gazprom pays Ukraine in kind with a percentage volume of the gas it ships thought the country en route to western Europe. Gazprom argues that, as the international gas price has soared, so it is only right that Ukraine be asked to pay more for its share.
The Russians have warned that, as a consequence of the impasse, export supplies to western Europe could be disrupted. Gazprom currently subsidizes supplies to former Soviet states but it is keen to end this practice.
Of course, when Germany bought gas for $80, $50 for gas to Ukraine seemed appropriate, Gazprom’s deputy chief executive Alexander Ryazanov said in televised comments. But when the price rose to $200, then of course $50 is a very small price and doesn’t correspond to our real costs.
However some observers have suggested that the dispute – which also involves a number of other countries including Lithuania, Armenia and Moldova – is essentially political. Gazprom’s actions are seen by critics as a ‘punishment’ for the pro-western agendas that many former Soviet bloc members have adopted over recent years.
Gazprom flatly denies the charge: This is not politics, Gazprom isn’t under pressure from the government, Mr Ryazanov told reporters. This is simple economics.
